The tax code currently has seven income-tax brackets for individuals that range from 10% to 37%. The 10% rate takes effect at the first dollar of taxable income, after benefits such as the standard deduction are applied. Each tax rate applies to income in that bracket. So a taxpayer whose last dollars are taxed at 24% will likely have portions of income taxed at 0, 10%, 12% and 22%.
The current rates and brackets were set by the 2017 tax overhaul, and they expire at the end of 2025. If Congress doesn’t make changes, the top rate will return to 39.6% in 2026.
